## 2025 Gold Investment Must-Know: When Will Prices Peak, and How Should Investors Respond?

Against the backdrop of increasing global economic uncertainty, gold has once again become the preferred safe-haven asset. After hitting a record high of $4,400 in October 2024, the market has begun to consider a core question: **When will gold fall?** This critical question reflects investors' rational thinking about the current market conditions. To answer it, we first need to understand the fundamental logic driving gold's rise.

### Central Bank Reserve Structure Adjustment—A Solid Foundation for Long-Term Support of Gold

According to the latest data from the World Gold Council, net gold purchases by central banks worldwide reached 634 tons in the first three quarters of 2024. Although slightly lower than the same period last year, it remains well above historical averages. More notably, 76% of surveyed central banks indicated they plan to increase their gold allocation over the next five years, while also expecting the share of US dollar reserves to decline.

This structural shift is not a short-term phenomenon but reflects a long-term strategic adjustment by global central banks toward reserve asset diversification. As a result, gold's status as a "trust asset" remains solid in the medium to long term.

### Federal Reserve Policy and Real Interest Rates—The Core Drivers of Gold Volatility

Gold prices show a clear negative correlation with real interest rates: when rates fall, gold rises; when rates rise, gold declines. This logic determines the future direction of gold.

According to CME interest rate tools, the probability of the Federal Reserve cutting interest rates by 25 basis points in December is 84.7%. As long as rate cut expectations exist, gold will have support. However, caution is warranted: when the pace of rate cuts slows or pauses, gold faces correction pressures. Historical experience shows that around US economic data releases and Federal Open Market Committee meetings, gold tends to be most volatile.

### Trump’s Tariff Policies and Geopolitical Risks—Short-Term Stimuli

The continuous implementation of tariff policies introduces uncertainty into the market, boosting demand for safe-haven assets. Based on historical experience (such as the US-China trade war in 2018), gold prices typically increase by 5–10% during periods of policy uncertainty. Ongoing conflicts like the Russia-Ukraine war and tensions in the Middle East also support gold prices, but these factors tend to be short-term and volatile.

The global high debt environment (IMF data shows total debt reaching $307 trillion) further limits countries' monetary policy flexibility, leaning toward maintaining loose monetary policies, indirectly boosting gold's attractiveness.

### What Do Experts and Institutions Say About Gold Trends in 2025?

Despite recent adjustments, major investment banks remain optimistic about gold's outlook:

- **JPMorgan** considers the current correction a "healthy adjustment" and has raised its Q4 2026 target price to $5,055 per ounce
- **Goldman Sachs** maintains its end-2026 target price at $4,900 per ounce
- **Bank of America** is more aggressive, raising its 2026 target price to $5,000 and suggesting that gold prices could even surge past $6,000 next year

Even in the physical gold market, chain brands like Chow Tai Fook and Luk Fook Jewelry maintain reference prices for pure gold jewelry above 1,100 RMB/gram, with no significant decline observed.

### When Will Gold Fall? Risk Warnings

In theory, the following situations could trigger a correction in gold prices:

**Unexpected Federal Reserve pause in rate cuts**—If economic data remains strong, the Fed might keep interest rates high, causing real interest rates to rise and directly suppress gold;

**Significant US dollar appreciation**—A stronger dollar increases the opportunity cost of holding gold, weakening its appeal;

**Easing geopolitical risks**—If international tensions stabilize, safe-haven funds may flow into risk assets;

**Short-term capital outflows**—When social media sentiment reverses, a rush of funds chasing gains could collectively exit, causing rapid declines.

### How Should Retail Investors Invest in Gold Now?

**For experienced short-term traders**, volatility presents opportunities. Gold's average annual amplitude is 19.4%, higher than the S&P 500's 14.7%, with frequent short-term fluctuations providing multiple entry and exit points. The key is to monitor economic calendars and capture price movements around US data releases.

**For novice investors**, gold's volatility risk should not be underestimated. If you want to participate:
- Start with small amounts to test the waters, avoiding blindly chasing highs
- Do not invest all your funds in gold; diversify your portfolio
- Physical gold transactions involve higher costs (5%–20%), which should be factored into your decision
- Long-term holding requires psychological readiness to endure medium-term fluctuations

**For hedging purposes**, gold is indeed a good choice, but the investment horizon should be extended to over 10 years to effectively smooth out volatility. Over this timeframe, gold could double in value or decline.

**The best strategy** is to hold long-term positions while using short-term volatility for swing trading, especially capitalizing on US trading hours. However, this requires market experience and risk management skills.

In summary, gold in 2025 still has upward potential, but investors must recognize that each rise may be accompanied by corrections. Rationally assess your risk tolerance, scientifically allocate your investment portfolio, and adopt a prudent attitude toward gold fluctuations.